Answer ALL the boxes and answer the Requirements $($PLEASE MAKE SURE ALL BOXES ARE FILLED AND ALL INFO IS IN THE IMAGES$)$

Using the single$-$rate method, allocate costs to the dark chocolate division and the milk

chocolate division in these three ways.

a$.$ Calculate the budgeted rate per round$-$trip and allocate costs based on round$-$trips

budgeted for each division.

b$.$ Calculate the budgeted rate per round$-$trip and allocate costs based on

actual round$-$trips used by each division.

c$.$ Calculate the actual rate per round$-$trip and allocate costs based on

actual round$-$trips used by each division.

Describe the advantages and disadvantages of using each of the three methods in

requirement $1.$ Would you encourage Chocolat Inc. to use one of these methods?

Explain and indicate any assumptions you made.

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The company has a separate division for each of its two products: dark chocolate

and milk chocolate. Chocolat purchases ingredients from Wisconsin for its dark

chocolate division and from Louisiana for its milk chocolate division. Both locations

are the same distance from Chocolat's Palo Alto plant. Chocolat Inc. operates a

fleet of trucks as a cost center that charges the divisions for variable costs $($drivers

and fuel$)$ and fixed costs $($vehicle depreciation, insurance, and registration fees$)$ of

operating the fleet. Each division is evaluated on the basis of its operating income.Requirement $1.$ Using the single$-$rate method, allocate costs to the dark chocolate division and the milk chocolate division in these three ways.

a$.$ Calculate the budgeted rate per round$-$trip and allocate costs based on round$-$trips budgeted for each division.

The budgeted rate per round$-$trip is $.$ This translates to indirect costs allocated to the dark chocolate division for

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and milk chocolate division for

b$.$ Calculate the budgeted rate per round$-$trip and allocate costs based on actual round$-$trips used by each division.

The budgeted rate per round$-$trip is $.$ This translates to indirect costs allocated to the dark chocolate division for

$|$and milk chocolate division for

c$.$ Calculate the actual rate per round$-$trip and allocate costs based on actual round$-$trips used by each division.

The actual rate per round$-$trip is $.$ This translates to indirect costs allocated to the dark chocolate division for

and milk chocolate division for

Requirement $2.$ Describe the advantages and disadvantages of using each of the three methods in requirement $1.$

When budgeted rates$/$budgeted quantities are used, the dark chocolate and milk chocolate divisions know at the start of

$2020$ that they will be charged a total of

for transportation of dark chocolate and

for transportation

of milk chocolate. In effect, the fleet resource becomes a cost for each division. This type of cost may motivate

the managers to $,$ the trucking fleet.

When budgeted rates$/$actual quantities are used, the dark chocolate and milk chocolate divisions know at the start of $2020$ that they will be charged a

the rate they will have to pay for transportation.

Each division can still control its total transportation costs by

of the

it had budgeted. Because the milk chocolate division's actual trips were

$]$ the budgeted trips, the dark chocolate division bears a proportionately

share of the fixed costs.

Would you encourage Chocolat Inc. to use one of these methods? Explain and indicate any assumptions you made.

Of the three single$-$rate methods suggested in this problem, the

I may be the best one to use. $($The management of Chocolat, Inc. would have to ensure that the managers of the dark chocolate and

milk chocolate divisions do not systematically overestimate their

use of the fleet division in an effort to drive down the

rate$).$